The price difference between National Brands and Private Labels has fallen significantly over time, possibly because Private Labels are increasing in both quality and market share relative to National Brands.

Private Labels are now promoted heavily, and promotions are more likely to occur in product categories with a large number of competing National Brand brands, suggesting that in many cases, Private Labels are priced and promoted to maximize market share within product categories.

Over the past two decades, private label food products have grown steadily in sales and often directly compete for market share with national brands. This competition lowers prices and  increases product choices for consumers.

This report analyzes the relationship between private label and national brand product prices and in-store promotions for two major U.S. grocery store chains during the 2007-2009 recession and the year following the recession (2010). Retailers promote private label products (offer price discounts) strategically in response to national brand pricing promotions to protect private label market share during national brand promotions.

However, the extent of the retailer response varies widely across supermarket departments and is also affected by both the density of food stores and the market share of supercenters within a market area. These findings hold true regardless of the state of the economy, although the magnitude of the interaction between national brands and private labels differs in times of recession and recovery.

Download the full report by the FDA (PDF)